Does an auction-listing and bidding platform that never handles customer payments have to collect Illinois sales tax as a marketplace facilitator?

Plain-English summary

Illinois ruled that this auction platform was not a marketplace facilitator for sales made by independent auctioneers. The platform displayed listings, registered bidders, and accepted bids, but the auctioneers controlled the sales. The company said it did not process, collect, hold, or transmit customer payments, directly or through others, and its auction site had no checkout or payment connection. Those facts failed the payment part of Illinois's marketplace facilitator test.

The company said its auction sales met the applicable volume threshold. That did not change the result: a sales threshold does not turn an advertising and bidding platform into a marketplace facilitator when the payment requirement is absent. The Department therefore said this taxpayer did not have to register, file returns, or remit Department-administered state and local retailers' occupation taxes as a marketplace facilitator for the third-party auction sales. It also said the marketplace facilitator recordkeeping rule did not apply to this taxpayer on these facts.

This ruling concerns the auction-listing platform described in the request. The company separately offered back-end software to auctioneers; it expressly did not ask for a ruling on that software or its subscription fees. The Department also warned that a platform can meet the payment requirement indirectly through third-party arrangements or by offering functionality that connects to a payment mechanism.

What this means for you

If you run an auction listing service, map the complete payment flow, including integrations and agreements with payment processors. In this ruling, auctioneers chose and controlled their own processors, invoiced buyers outside the auction site, and handled payment themselves. The Department's answer depends on those facts; another platform's checkout or payment arrangements may produce a different result.

Auctioneers and other sellers should assess their own Illinois tax duties. The ruling does not exempt their sales from tax, and it does not decide taxes or fees outside the Department-administered marketplace facilitator rules.

Common questions

Q: Does hosting listings and bids alone make this company a marketplace facilitator?

A: No. Illinois required both listing or advertising taxable property and collecting and transmitting customer payment, directly or indirectly. This company's auction site did the former but, on the stated facts, not the latter.

Q: What if sales through the site exceed Illinois's marketplace threshold?

A: The company represented that the applicable thresholds were met. The Department still ruled that it was not a marketplace facilitator because it lacked the payment function. The letter describes a $100,000 gross-receipts threshold beginning January 1, 2026 for a business that otherwise qualifies as a facilitator.

Q: Does the ruling decide tax on the company's separate auction software subscriptions?

A: No. The request expressly excluded that software and its subscription fees.

Q: Can another auction site rely on this private letter ruling?

A: No. The Department says it binds only the requesting taxpayer if the stated facts are correct and complete, and it can expire or be revoked under the conditions stated in the letter.

Citations and references

• 35 ILCS 120/1 and 86 Ill. Adm. Code 131.130(a)(1)(B): the letter quotes the two-part marketplace facilitator test, including payment collection and transmission through third-party arrangements.
• 86 Ill. Adm. Code 131.130, Example 1: the Department compares an advertising-only network whose buyers and sellers arrange payment themselves.
• 35 ILCS 120/2(c-5): the letter describes the $100,000 threshold beginning January 1, 2026.
• 86 Ill. Adm. Code 131.145: the Department says its marketplace facilitator recordkeeping requirements do not apply to this taxpayer on the stated facts.
• 2 Ill. Adm. Code 1200.110: the letter states its taxpayer-specific reliance and revocation terms.
• ST-25-0027-GIL (April 28, 2025): the earlier Department guidance cited in the response.

Source

• Illinois 2026 sales tax letter-rulings index
• Official ST 26-0001-PLR PDF

Original ruling text

ST 26-0001-PLR

09/04/2026

MARKETPLACE FACILITATORS

A person who provides advertising services, including listing products for sale, is not considered a marketplace facilitator, so long as the advertising service platform or forum does not, either directly or indirectly, through agreements or arrangements with third parties, collect payment from the customer and transmit that payment to the marketplace seller regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for its services. 35 ILCS 120/1; 86 Ill. Adm. Code 131.105, 131(a). (This is a PLR). September 4, 2026 NAME TITLE, COMPANY1 ADDRESS1 EMAIL Dear NAME: This letter is in response to your letter dated February 19, 2026, in which you requested information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are issued by the Department in response to specific taxpayer inquiries concerning the application of a tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding the topic about which they have inquired. A GIL is not a statement of Department policy and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at https://tax.illinois.gov/ to review regulations, letter rulings and other types of information relevant to your inquiry. Review of your request disclosed that all the information described in paragraphs 1 through 8 of Section 1200.110 appears to be contained in your request. This Private Letter Ruling will bind the Department only with respect to COMPANY2, for the issue or issues presented in this ruling, and is subject to the provisions of subsection (e) of Section 1200.110 governing expiration of Private Letter Rulings. Issuance of this ruling is conditioned upon the understanding that neither COMPANY2, nor a related taxpayer is currently under audit or involved in litigation concerning the issues that are the subject of this ruling request. INQUIRY: Taxpayer, COMPANY2 (“Company”), is a STATE limited liability company with its principal place of business at ADDRESS2 and FEIN NUMBER. Company

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develops and licenses auction technology, including downloaded software and Software as a Service (“SaaS”) solutions, to independent auctioneers (“Auctioneers”). In September 2025, Taxpayer’s representatives submitted an anonymous request for a non-binding General Information Letter (“GIL”) describing a similar fact pattern and received the Department’s response dated November 21, 2025. This request for Private Letter Ruling concerns the application of the marketplace facilitator provisions under the Illinois Retailers’ Occupation Tax Act and related Department regulations (35 ILCS 120/1; 86 Ill. Adm. Code Part 131) to Company’s operation of its PRODUCT1 platform described below, and the resulting obligations (if any) to register, collect, remit, and maintain records for taxes administered by the Department on third-party Auctioneer sales made through PRODUCT1. The tax periods at issue are DATE1, through DATE2. Taxpayer represents that the applicable marketplace facilitator threshold(s) in 86 Ill. Adm. Code 131.135(a) are satisfied for the tax periods at issue. Taxpayer is not currently under audit by the Department, is not in a protest period following an audit, and is not a party to any pending administrative or judicial proceeding involving the Department with respect to the issues presented herein. To the best of the knowledge of both the taxpayer and the taxpayer’s representative, the Department has not previously issued a private letter ruling on the same or a similar issue for the taxpayer or a predecessor. Other than the anonymous GIL request described above, neither the taxpayer nor any representatives previously submitted the same or a similar issue to the Department. I.

Background

COMPANY2 (“Company”) is a technology developer that provides a suite of auction software solutions for traditional, online, and hybrid auctions. Company operates through its technology platforms: PRODUCT2, PRODUCT3, PRODUCT4 (collectively “PRODUCT2”), and PRODUCT1 (“PRODUCT1”). PRODUCT2 is a software platform that provides cataloging, clerking, cashiering, accounting, mailing list management, inventory management, and multi-parcel capabilities to Auctioneers (“Auctioneers, Customers, Users”). PRODUCT2 provides the functionality to curate and display auction listings, create Bidder registrations, and capture online bidding activity.

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PRODUCT2 supports multiple auction types (e.g., online-only auctions, prebidding auctions, hybrid live and online auctions, and listings where the bidding occurs off-software platform), some of which require the Auctioneer to manually enter submitted bids into PRODUCT2 (e.g., for offline auctions) and Auctioneers have the ability to edit bids in PRODUCT2. Importantly, PRODUCT2 does not host auctions, and Bidders cannot submit bids via PRODUCT2. Rather, PRODUCT2 serves as a back-end platform that allows Auctioneers to track and manage auctions that are conducted on other platforms to which PRODUCT2 is connected via API or other integration. For sales tax purposes, Company treats PRODUCT2 as a software/SaaS platform and collects sales tax on subscription fees, as applicable. For purposes of this request, Company is not seeking the state’s opinion or guidance related to PRODUCT2 or its subscription fees. Among other independent platforms not associated with Company, PRODUCT2 is integrated with PRODUCT1, Company’s online platform for advertising third-party auctions. PRODUCT1 provides an Auctioneer the ability to list items for auction, register Bidders, and facilitate bidding under seller-defined terms. Items made available on PRODUCT1 by the Auctioneer are often simultaneously available for bid on other online platforms and/or via in-person auctions. For auctions advertised on its platform, Company does not: (1) determine, accept, reject, or otherwise make bidding decisions on behalf of any Auctioneer (Auctioneers retain full control over bid acceptance, reserves, and sale confirmation), (2) take title to, store, ship, or fulfill any items, (3) set prices, reserves, or buyer’s premiums (all such terms are established by the Auctioneer), (4) act as an agent or broker with authority to bind an Auctioneer to a sale, or (5) process, collect, hold, or transmit payments for Auctioneer sales, either directly or indirectly. Company can see auction dates and item description details, along with the buyer’s premiums displayed on PRODUCT1; these premiums are text only, as entered by the Auctioneer, and Company does not determine a minimum bid amount, the buyer’s premium or any other auction-specific fees. Company can also view the registration requirements established by the Auctioneer, the accepted payment methods, as provided by the Auctioneer for display purposes, and the auction type. For clarity, PRODUCT1 displays accepted payment methods as Auctioneer-provided informational text and does not provide a link, “pay now” function, checkout, or other payment mechanism. At the user level, Company can access Bidder registration information such as the user’s name, address, and contact details, as well as limited paymentcard metadata (e.g., last four digits) provided during bidder registration for

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verification purposes only. Company also maintains Bidder reputation scores and tracks related approvals and declines by the Auctioneer. In addition, PRODUCT1 generates certain automated notifications, including outbid alerts and auction-closing reminders. For example, the platform generates an automated ‘you may have won’ notification to Bidders at the close of an auction. However, Company cannot confirm whether any Bidder or bid submitted in PRODUCT1 has won an auction, as Auctioneers have sole authority to establish reserve or seller-confirmation requirements, retain autonomy to conduct post-close negotiations, or may reassign or reopen lots, which may alter the outcome of the auction. As such, the Auctioneer and not Company, retains sole authority to decline a transaction and award the purchase to a different final purchaser. PRODUCT1 functions in a manner analogous to a traditional shopping mall, as it provides space and access for buyers to browse and purchase sellers’ goods but plays no contractual or economic role in any transaction between Auctioneers and Bidders. Each Auctioneer independently controls its inventory, sets pricing, executes sales transactions, collects payment, and fulfills orders. Auctioneers maintain full control over their auction events, including setting bidding terms, managing Bidder’s eligibility, reviewing and accepting bids, and choosing the form of payment. While Company provides the digital environment for Auctioneers to conduct, it does not (1) set prices or reserve amounts, (2) finalize sales or confirm winning bids, (3) engage in payment processing/collection or settlement, (4) facilitate delivery of auction items to winning Bidders, or (5) enforce contractual terms between the Auctioneer and the Bidder. PRODUCT1 does not include a check-out function connected to a payment processor, nor does the platform offer a “Buy Now” option. All bids submitted in an auction are independent of all other auctions, and the engagement is directly between the Auctioneer and its Customer. After an Auctioneer closes an auction, Company does not have visibility into the final outcome of the auction or whether an auction’s winning Bidder completed the purchase (i.e., made payment, arranged for receipts of goods). All payment-related activities transpire outside of PRODUCT1 and are directly between Bidders and Auctioneers. Company does not collect, hold, or distribute funds related to auctions on its platform. Auctioneers independently select, contract with, and control their preferred third-party payment processors. PRODUCT2 includes functionality to allow Auctioneers to select their preferred method of payment and processors for auctions and to track the

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payment status of items. As part of this, Company maintains referral relationships with certain payment processors through arrangements or agreements; however, it does not directly or indirectly engage in the processing of payments or in any way direct or control the method of payment for any transaction related to an auction advertised on PRODUCT1, and no payment-related activities are conducted on PRODUCT1. Additionally, Company does not handle refunds or chargebacks. After the close of an auction, Auctioneers download the bid data from their account and prepare all invoices locally in PRODUCT2 or their own systems. Company earns revenue through its PRODUCT2 platform subscription fees, referral fees, premium features, listing fees, and advertising, with the PRODUCT1 portion of this revenue comprised of the latter two. PRODUCT1 does not market or represent individual auctions as its own. Company neither engages in dispute resolution between Auctioneers and Bidders, nor does it have a role in auction specific inquiries other than to route messages from potential Bidders if misdirected to the platform. Although Company may view an Auctioneer’s administrative dashboard for technology troubleshooting purposes, it does not edit bids, invoices, payment information, or any financial or transactional data on the Auctioneer’s behalf. All Bidder-facing inquiries, including questions regarding invoices, taxability, payment issues, or fulfillment, are handled exclusively by the Auctioneer, as Company is not party to the transaction and does not manage or control contractual obligations between Bidders and Auctioneers. If issues arise, such as a Bidder failing to pay or an Auctioneer failing to ship, PRODUCT1 may route the matter to the responsible party and expect them to resolve the matter. If complaints persist, PRODUCT1 may block the offending party based on non-compliance with its Terms and Conditions. II.

Issues

1.

Does Company’s operation of PRODUCT1, as described above, cause Company to be a “marketplace facilitator” under 35 ILCS 120/1 and 86 Ill. Adm. Code 131.130?

2.

If Company is not a marketplace facilitator, does the Department agree Company has no obligation to register, collect, or remit Illinois Retailers’ Occupation Tax/Use Tax on the underlying sales of tangible personal property by Auctioneers to Illinois purchasers through PRODUCT1 (and that the marketplace facilitator recordkeeping requirements in 86 Ill. Adm. Code 131.145 do not apply to Company with respect to those Auctioneer sales)?

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III.

Taxpayer’s Position

1.

Company’s activities, as described, do not meet the definition of a “marketplace facilitator” under the Illinois Retailers’ Occupation Tax Act and the Department’s marketplace facilitator regulations because Company does not (directly or indirectly) collect payment from Bidders for Auctioneer sales, does not provide PRODUCT1 with functionality for connection to a payment mechanism for settlement of Auctioneer sales, and does not transmit payments to Auctioneers.1

2.

Company operates as a technology provider (downloaded software and SaaS) to Auctioneers and continues to collect and remit Illinois sales and use tax on its taxable software/SaaS charges to Auctioneers, as applicable. Taxpayer is not requesting a ruling regarding the taxability of Company’s software/SaaS charges.

3.

Accordingly, Company is not required to register as a marketplace facilitator or collect/remit State and local retailers’ occupation taxes administered by the Department with respect to Auctioneer sales associated with auctions conducted by auctioneers using PRODUCT1, and the related marketplace-facilitator recordkeeping requirements do not apply.2

IV.

Statement of Authorities

The authorities supporting Taxpayer’s position include, without limitation, 35 ILCS 120/1 and the Department’s marketplace facilitator regulations at 86 Ill. Adm. Code Part 131, including 86 Ill. Adm. Code 131.105, 131.130, 131.135, and 131.145. Taxpayer recognizes that the Department has stated that “provision on a marketplace of functionality for connection to a payment mechanism meets” the collection/transmission element under 86 Ill. Adm. Code 131.130(a)(1)(B), and that the marketplace facilitator provisions are intended to apply broadly, including through “indirect” arrangements. Taxpayer’s position is that these authorities are not controlling on the facts presented because PRODUCT1 does not provide bidders with a checkout or other payment workflow and does not provide functionality for connection to a payment mechanism for settlement of Auctioneer sales; Company does not collect or transmit bidder payments to Auctioneers.

1
2

35 ILCS 120/1; 86 Ill. Adm. Code 131.105; 86 Ill. Adm. Code 131.130(a)(1). 86 Ill. Adm. Code 131.135; 86 Ill. Adm. Code 131.145

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V.

Discussion

A “marketplace facilitator” is generally a person who, pursuant to an agreement with an unrelated third-party marketplace seller, facilitates a retail sale by (i) listing or advertising the seller’s tangible personal property for sale in a marketplace, and (ii) either directly or indirectly, through agreements or arrangements with third parties, collecting payment from the purchaser and transmitting payment to the marketplace seller.3 A “marketplace” is a physical or electronic place, forum, platform, application, or other method by which a marketplace seller sells or offers to sell items.4 The Department’s regulations further provide that “provision on a marketplace of functionality for connection to a payment mechanism” satisfies the collection/transmission element under 86 Ill. Adm. Code 131.130(a)(1)(B). However, provision of advertising services, including listing products for sale, is not enough to qualify as a marketplace facilitator so long as the advertising service platform or forum does not engage (directly or indirectly) in the activities described in 86 Ill. Adm. Code 131.130(a)(1)(B).5 PRODUCT1 enables Auctioneers to advertise auctions and accept online bids under Auctioneer-defined terms. Auctioneers—not Company—determine the terms of sale, reserve requirements, bidder eligibility, and accepted payment methods, and Auctioneers remain solely responsible for completing sales, collecting payment, and fulfilling orders. PRODUCT1 does not provide Bidders with a checkout function, shopping cart, “pay now” button, or other payment workflow through which a Bidder can tender payment for an Auctioneer’s sale. PRODUCT1 does not collect, hold, route, or transmit Bidder payments (or payment instructions) to Auctioneers. PRODUCT1 does not generate or transmit invoices, and payment for Auctioneer sales is concluded outside PRODUCT1 directly between Auctioneers and Bidders using Auctioneer selected methods (including cash, check, wire, or an Auctioneer’s independently selected third-party payment processor). Company is not a party to the payment processing agreements between Auctioneers and their selected processors and does not handle refunds or chargebacks. Company does not provide an integrated checkout or payment function for auction transactions and does not authorize, capture, settle, transmit, or 3

35 ILCS 120/1; 86 Ill. Adm. Code 131.130(a)(1).
86 Ill. Adm. Code 131.105.
5
86 Ill. Adm. Code 131.130(a)(2).
4

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otherwise handle payments. Auctioneers independently select and contract with third-party payment processors (or accept payment via other methods such as cash, check, or bank transfer). Any payment link provided to the Bidder redirects the Bidder to the Auctioneer’s selected payment channel and remains clearly separate from PRODUCT1’s bidding interface. To the extent PRODUCT1 displays “accepted payment methods,” that information is provided by the Auctioneer for informational display purposes and does not provide a link or other functionality for connection to a payment mechanism for settlement of Auctioneer sales. To the extent PRODUCT1 captures limited payment-card metadata as part of bidder registration (e.g., last four digits), Company does not charge or authorize payments on that card for Auctioneer sales and does not transmit payment to Auctioneers; Auctioneer purchases are not settled through PRODUCT1. In limited instances, Company may have separate marketing referral arrangements with certain payment processors; however, those arrangements do not provide functionality for connection to a payment mechanism within PRODUCT1 for settlement of Auctioneer sales and do not give Company the ability to collect or transmit Bidder payments to Auctioneers. Because Company does not satisfy the collection/transmission element under 86 Ill. Adm. Code 131.130(a)(1)(B), Company is not a marketplace facilitator. Company’s activities are instead analogous to an advertising/listing service that is expressly excluded from marketplace facilitator classification when the platform does not engage (directly or indirectly) in the payment activities described in 86 Ill. Adm. Code 131.130(a)(1)(B).6 The Department has also indicated that an “internet auction listing service” meeting the marketplace facilitator requirements (including the payment element and applicable thresholds) is treated as a marketplace facilitator.7 Even if PRODUCT1 were characterized as an internet auction listing service, Company would not be a marketplace facilitator because PRODUCT1 does not collect/transmit payments or provide functionality for connection to a payment mechanism for settlement of Auctioneer sales as contemplated by 86 Ill. Adm. Code 131.130(a)(1)(B).

6
7

86 Ill. Adm. Code 131.130(a)(2).
86 Ill. Adm. Code 130.1915(c); 225 ILCS 470/5-10; 86 Ill. Adm. Code 131.135.

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VI.

Conclusion

We respectfully request that the Department confirm Taxpayer’s position that its activities do not classify it as a “marketplace facilitator” under 35 ILCS 120/1 and 86 Ill. Adm. Code 131.130 and, therefore, that Taxpayer is not required to register, collect, or remit Illinois Retailers’ Occupation Tax/Use Tax on third-party Auctioneer sales made through PRODUCT1 (or comply with marketplace facilitator recordkeeping requirements) based on the facts presented. If this ruling request does not provide sufficient information to support our conclusions, we would respectfully request a meeting to discuss the matter further. Likewise, if the Department disagrees with our conclusions, we respectfully request that the Department contact us prior to issuing a ruling. Other than deletions required under 2 Ill. Adm. Code 1200.110(c), Taxpayer does not request deletion of any additional trade secret information from the publicly disseminated version of the ruling. DEPARTMENT’S RESPONSE: Retailers’ Occupation Tax The Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this State in the business of selling tangible personal property at retail to purchasers for use or consumption. 35 ILCS 120/2; 86 Ill. Adm. Code 130.101. In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind of tangible personal property that is purchased anywhere at retail from a retailer. 35 ILCS 105/3; 86 Ill. Adm. Code 150.101. These taxes comprise what is commonly known as “sales tax” in Illinois. If the purchases occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase. 35 ILCS 105/3-45; 86 Ill. Adm. Code 150.401. The retailers are then allowed to retain the amount of Use Tax paid to reimburse themselves for their Retailers’ Occupation Tax liability incurred on those sales. 86 Ill. Adm. Code 150.130(b). If the purchases occur outside Illinois, purchasers must self-assess their Use Tax liability and remit it directly to the Department. See 35 ILCS 105/3-45; 86 Ill. Adm. Code 150.701(a). Marketplace Facilitators A “marketplace” is a physical or electronic place, forum, platform, application, or other method by which a marketplace seller sells or offers to sell items. 35 ILCS 120/1; 86 Ill. Adm. Code 131.105. A “marketplace seller” is a person that makes sales through a marketplace operated by an unrelated third-party marketplace facilitator. 35 ILCS 120/1.

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A “marketplace facilitator” is a person who, pursuant to an agreement with an unrelated third-party marketplace seller, directly or indirectly through one or more affiliates facilitates a retail sale by an unrelated third-party marketplace seller by: 1.

Listing or advertising for sale by the marketplace seller in a marketplace, tangible personal property that is subject to tax under Retailers’ Occupation Tax Act; and

2.

Either directly or indirectly, through agreements or arrangements with third parties, collecting payment from the customer and transmitting that payment to the marketplace seller regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for its services. 35 ILCS 120/1; 86 Ill. Adm. Code 131.130(a)(1). Provision on a marketplace of functionality for connection to a payment mechanism meets these requirements. 86 Ill. Adm. Code 131.130(a)(1)(B).

A person who provides advertising services, including listing products for sale, is not considered a marketplace facilitator, so long as the advertising service platform or forum does not engage, directly or indirectly through one or more affiliated persons, in the activities described in paragraph (2) of the definition of “marketplace facilitator”. “Marketplace facilitator” does not include any person licensed under the Auction License Act. This exemption does not apply to any person who is an Internet auction listing service, as defined by the Auction License Act. 35 ILCS 120/1. “"Internet auction listing service” means a website on the Internet, or other interactive computer service, that is designed to allow or advertise as a means of allowing users to offer personal property or services for sale or lease to a prospective buyer or lessee through an online bid submission process using that website or interactive computer service and that does not examine, set the price, prepare the description of the personal property or service to be offered, or in any way utilize the services of a natural person as an auctioneer. 225 ILCS 407/5-10. Beginning January 1, 2021, and through December 31, 2025, a marketplace facilitator is engaged in the occupation of selling at retail in Illinois for purposes of the Retailers’ Occupation Tax Act if during the previous 12 month-period either of following thresholds is met: 1)

the cumulative gross receipts from sales of tangible personal property to purchasers in Illinois made through the marketplace by the marketplace facilitator and by marketplace sellers are $100,000 or more; or

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2)

the marketplace facilitator and marketplace sellers selling through the marketplace cumulatively enter into 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois. 86 Ill. Adm. Code 131.135(a); 35 ILCS 120/2(c).

Beginning January 1, 2026, a marketplace facilitator is engaged in the occupation of selling at retail in Illinois for purposes of the Retailers’ Occupation Tax Act if, during the previous 12-month period, the cumulative gross receipts from sales of tangible personal property to purchasers in Illinois made through the marketplace by the marketplace facilitator and by marketplace sellers are $100,000 or more. 35 ILCS 120/2(c-5). A marketplace facilitator meeting this threshold is required to register with the Department, file returns, and remit all applicable State and local retailers’ occupation taxes administered by the Department for all sales made over the marketplace to Illinois purchasers, including its own sales and sales made on behalf of marketplace sellers. 35 ILCS 120/2(c-5). Generally, a marketplace seller is not liable for State and local retailers’ occupation taxes for sales of tangible personal property sold to Illinois purchasers through a marketplace. 86 Ill. Adm. Code 131.150(a). The marketplace facilitator would be liable for the applicable taxes on these sales unless the marketplace seller provides it with incorrect information. See 35 ILCS 120/2(c-10), (l), (m). The Department is prohibited from collecting State and local retailers’ occupation taxes from both the marketplace facilitator and the marketplace seller on the same transaction. 35 ILCS 120/2(h); 86 Ill. Adm. Code 131.145(l) and 131.150(h). Marketplace sellers may not elect to collect and remit tax liability for their own sales made over a marketplace facilitated by a qualifying marketplace facilitator. Further, if a marketplace facilitator does not meet a threshold, it is not considered a retailer for sales taking place over its marketplace. Marketplace sellers must then remit tax on their own behalf and file returns with the Department when selling over a marketplace that has not met a threshold. Note that the rules established under 86 Ill. Adm. Code 131 apply only to the remittance of State retailers’ occupation tax and local retailers’ occupation taxes administered by the Department. Marketplace sellers that incur other taxes or fees administered by the Department, or other taxes not administered by the Department, remain liable for the remittance of those taxes to the Department or other taxing authority. 86 Ill. Adm. Code 131.107(c). The Department has encountered various marketing and payment arrangements used by ecommerce businesses. Notably, the broad language of the statute and administrative rules discussing marketplace facilitators includes such broad terms as “facilitates,” “indirectly,” “arrangement,” and “provision,” allowing for its application to a

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wide variety of ecommerce businesses. See 35 ILCS 120/1; 86 Ill. Adm. Code 131.105. Accordingly, under Section 131.130(a)(1)(B), the participation of a marketplace facilitator in the collection and payment process is not limited to only those instances where the purchaser directly pays the marketplace facilitator and in turn, the marketplace facilitator directly remits the payment to the marketplace seller. Such a restrictive reading would be contrary to the language in 35 ILCS 120/1, and 86 Ill. Adm. Code 131.130(a)(1)(B). For various examples of the marketplace facilitator criteria being applied to different business models, see 86 Ill. Adm. Code 131.130. A marketplace connects multiple third-party sellers with buyers. The multiple seller model is a key difference between an online marketplace and a traditional ecommerce online store. An ecommerce store typically has a single seller. In contrast, a marketplace connects multiple, unrelated third-party sellers with buyers. While it is possible that a platform which hosts multiple sellers would not be considered a “marketplace” for purposes of meeting the requirements under 86 Ill. Adm. Code 131.105 and 131.130, such instance would be an exception to the general rule and would be based on the specific facts of each case. Some considerations could include whether: 1)

a vendor’s setup on the platform functions as its own online store or website and is perceived as such by the public;

2)

a vendor will have its own URL;

3)

a vendor sells a unique product that could not be found in a normal product search through the marketplace (e.g. customers are parents purchasing school photos of their children); and

4)

the platform does not function as a traditional multiple-seller marketplace (e.g. the platform does not allow multiple sellers to sell to a customer). Generally, if a customer is directed to a platform from a code or link for a specified seller and the platform does not allow a customer to search or browse for other sellers for the same or different product, the platform is not acting as a marketplace facilitator.

In situations where a platform provides advertising only and all payments for tangible personal property are made either directly to the retailer or to a third-party with whom the retailer has contracted, the advertising platform is not acting as a marketplace facilitator. Marketplace facilitators must either directly collect payment from customers and transfer payment to sellers or indirectly, through agreements the marketplace facilitator has made

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with third parties, collect payments from customers and transmit payments to sellers. ST25-0027-GIL, April 28, 2025. Conclusion According to the Taxpayer, PRODUCT1 is an online platform that allows for “advertising third-party auctions. The platform provides [multiple] Auctioneers (a third-party seller) the ability to list items for auction, register Bidders, and facilitate bidding under sellerdefined terms.” Further, “[f]or auctions advertised on its platform, [Taxpayer] does not: (1) determine, accept, reject, or otherwise make bidding decisions on behalf of any Auctioneer (Auctioneers retain full control over bid acceptance, reserves, and sale confirmation), (2) take title to, store, ship, or fulfill any items, (3) set prices, reserves, or buyer’s premiums (all such terms are established by the Auctioneer), (4) act as an agent or broker with authority to bind an Auctioneer to a sale, or (5) process, collect, hold, or transmit payments for Auctioneer sales, either directly or indirectly.” Request, p. 2. “Auctioneers maintain full control over their auction events, including setting bidding terms, managing Bidder’s eligibility, reviewing and accepting bids, and choosing the form of payment. While [Taxpayer] provides the digital environment for Auctioneers to conduct, it does not (1) set prices or reserve amounts, (2) finalize sales or confirm winning bids, (3) engage in payment processing/collection or settlement, (4) facilitate delivery of auction items to winning Bidders, or (5) enforce contractual terms between the Auctioneer and the Bidder.” Request, p. 3. “PRODUCT1 does not include a check-out function connected to a payment processor, nor does the platform offer a “Buy Now” option. All bids submitted in an auction are independent of all other auctions, and the engagement is directly between the Auctioneer and its Customer. After an Auctioneer closes an auction, [Taxpayer] does not have visibility into the final outcome of the auction or whether an auction’s winning Bidder completed the purchase (i.e., made payment, arranged for receipt of goods). All paymentrelated activities transpire outside of PRODUCT1 platform and are directly between Bidders and Auctioneers. [Taxpayer] does not collect, hold, or distribute funds related to auctions on its platform. Auctioneers independently select, contract with, and control their preferred third-party payment processors.” Request, p. 3. Based on these factual representations, the Department has determined that the Taxpayer does not meet the requirements of 86 Ill. Adm. Code 131.130(a)(1)(B) to be considered a marketplace facilitator. In fact, EXAMPLE 1 under 86 Ill. Adm. Code 131.130 is comparable with Taxpayer’s business set-up: EXAMPLE 1: Carabibi, a social media network, provides a forum in which persons using the network can buy and sell used tangible personal property. Carabibi functions solely as an advertising platform bringing buyers and sellers together. Once the buyer and seller have contacted each other

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over the network, they must negotiate the sale and make payment arrangements themselves. While the forum provided by Carabibi constitutes a marketplace as defined in Section 131.101, Carabibi is not considered a marketplace facilitator because it does not engage in the activities described in subsection (a)(1)(B). Because Taxpayer would not be considered a marketplace facilitator, it would incur no duty to register with the Department as a marketplace facilitator, to file returns, or to remit applicable State and local retailers’ occupation taxes administered by the Department for all sales made over the marketplace to Illinois purchasers. Taxpayer would also not be subject to the requirements of 86 Ill. Adm. Code 131.145 regardless of whether they meet the cumulative gross receipts threshold requirement of 131.135(a)(1) because they are not a marketplace facilitator. The factual representations upon which this ruling is based are subject to review by the Department during the course of any audit, investigation, or hearing and this ruling shall bind the Department only if the factual representations recited in this ruling are correct and complete. This Private Letter Ruling is revoked and will cease to bind the Department 10 years after the date of this letter under the provisions of 2 Ill. Adm. Code 1200.110(e) or earlier if there is a pertinent change in statutory law, case law, rules or in the factual representations recited in this ruling. I hope this information is helpful. If you have further questions concerning this Private Letter Ruling, you may contact me at (217) 782-7055. If you have further questions related to the Illinois sales tax laws, please visit our website at https://tax.illinois.gov/or contact the Department’s Taxpayer Information Division at (800) 732-8866. Very truly yours,

Katarzyna A. Kowalska
Chairwoman, Private Letter Ruling Committee
KAK:GLE:sce

Printed by the authority of the state of Illinois.
Electronic Only - One Copy
Issued 09/04/2026; Redacted 10/9/2026